Oil: bears are on a rampage

The Commodity Futures Trading Commission (CFTC) reported, for the week ending last Tuesday, that the Commitments of Traders (COT) reports showed.

Non-commercial large speculators decreased their net position to purchase oil contracts by 24.2 thousand contracts, bringing the total to 183.2 thousand. This marks the ninth consecutive week that these large speculative players have reduced their net position, with the current total being the lowest since July 11.

Hedger operators have been decreasing the net position for selling oil contracts for the majority of the past two months, with the most recent reduction being 23.2 thousand contracts, bringing the total to 206.8 thousand.

The open interest rose by 10 thousand contracts, bringing the total to 1.564 million.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators decreased by 0.37 over the week, bringing it to 2.08.

Data from COT oil reports indicate a growing bearish sentiment. Following the monthly expiration of futures, traders continued to reduce their net position as prices rose. This resulted in the net position reaching its lowest level in almost 5 months. Large speculators increased their sales by 18% over the week, which could lead to a further decrease in oil prices if the trend continues.

WTI

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds), usually trade in line with the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, generally do not have much impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies), usually trade against the trend (black line). The net position is the difference between the number of buy and sell contracts. Open interest is the total of all open positions in the market.